Three-dimensional carbon fibre/epoxy resin composites were prepared, which had either three-axis or five-axis carbon fabrics (3D-3A or 3D-5A) in four woven gauges, and Teflon® was embedded in the fabric structures to initiate various types of microcracks. The flexural, interlaminar shear, and impact properties of these 3-D composites were studied. The results indicated that the flexural properties of 3D-3A were better than those of 3D-5A. However, 3D-5A structures gave better impact strength compared to 3D-3A. The interlaminar shear strength depended on the weave gauge. The effect of microcracks on the properties of 3-D composites was generally kept within 10%, but transverse microcracks lowered the flexural properties of 3-D composites by 10–20%. The 3D-3A composites showed cracks along the interface between the Z axial bundles and the matrix, whereas the 3D-5A showed 45°-axial bundle pull-out.